Wall Street’s biggest tech companies saw heavy selling as investors have started questioning whether the AI-driven market rally had become too stretched.
The Nasdaq and the S&P 500 fell to over one-week lows on Tuesday, dragged down by sharp losses in semiconductor stocks as investors braced for a more hawkish Federal Reserve and scrutinised growing debt-funded AI spending.
If losses hold, the Nasdaq 100 would lose over $1 trillion in market value. Nvidia fell 3%, Alphabet shed 1.2%, and chipmakers Intel, Marvell Technology and Advanced Micro Devices fell between 6.2% and 8.7%.
Amid the broader tech selloff, SpaceX has emerged as the biggest talking point, with its stock slipping below its IPO opening price. The company has now lost more than $600 billion in market value after declining for three consecutive trading sessions. Monday’s sharp 16% drop wiped out nearly $400 billion in a single day, making it one of the largest one-day value losses ever recorded by a listed company.
As the recent crash rattles investor confidence, experts explain how to navigate market volatility and determine the right allocation to futuristic technologies such as AI and space tech.
SpaceX crash: ‘Value sits in the future, the value is going to swing’
Speaking about the SpaceX crash in particular, Viram Shah, Founder & CEO, Vested Finance, noted, “A 16% drop in a single session looks big, but for a company that listed barely two weeks ago and is funding a huge AI and space build-out, that’s close to the cost of admission.”
High-growth tech doesn’t trade on this year’s earnings but it trades on a story about the next decade.
“The signal here isn’t that something’s broken. It’s that when most of the value sits in the future, the value is going to swing. If you can’t sit through a 20% drawdown without flinching, the position was probably too big to start with.”
What Indian investors should know:
He further explains, Space technology is no longer just about rockets. It now includes satellite internet, defence applications, satellite data, and even AI-powered services built around space infrastructure.
In fact, Indian investor should see this as an opportunity as “it has become much easier to invest in these themes through US-listed stocks and ETFs.”
How much should you invest in futuristic tech?
The biggest challenge here is balancing innovation with valuation risk. Shah said, “On a name like SpaceX, you’ll see serious analysts land a long way apart on fair value, which is really just an honest way of saying nobody’s sure.”
You can be completely right about where space and AI are heading and still overpay on the way in.
“Hence they should be treated as a small, high-conviction part of a portfolio rather than its foundation.”
Strategy to follow: Keep the speculative, high-conviction stuff small enough that you can actually hold it through the swings, and let a diversified core do the heavy lifting. Innovation tends to reward patience more than precision timing.”